Overall, it was a fairly uneventful week in terms of price action in the stock markets. We had a lot of nice tradable moves during the week, but ultimately the market did not move into or out of any technical significant areas. Volume was light, except for Friday which was due to index rebalancing and contract expirations. In terms of the overall movement throughout the week, the S&P traded in a smaller range than average, only moving about 21 points all week; the weekly (14) average is just under 36 points and heading into this week was slightly higher.

Technically, the stock market (S&P and Dow Jones) are still range bound and that range is very much intact. The S&P closed on Friday right around 1102.

Near term support is at 1094-1093 but movement below this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in. The target for that breakout is 1055 which is just below a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals if the breakout downward does occur.

There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action, given our average weekly range, to reach 1055 if in fact this market does break lower.

If we look at a daily chart, we see that the level we are at right now is right on a downward sloping trendline extending back from late 2007. Really, the current range gives us our trading signals, as a breakout of the current range will also cause a break of the old trendline, a break lower out of the range will show that trendline has held. But no matter which way the market breaks, old trendlines often have an impact on future price movements (see my article in the December issue of Stock & Commodities magazine), so it is worthwhile keeping on the charts.

On the upside we have resistance at 1104 which was respected during the afternoon sessions of Thursday and Friday. Beyond this we have the Thursday open near 1106 followed by 1108 which will also act are resistance. Beyond this is no significant resistance until 1116, although there is some minor levels at 1113-1114. The resistance area near the highs is 1116-1120. Moves have been fast and sharp up in this area, and it deserves respect. If this range is broken out of, targets are 1123, 1128 and 1131.

The Dow Jones Industrials is another index can be looked at. That market has been analyzed by my friend Adam Hewison. He uses a few different tools to gauge this market, and also gives a slightly longer term view for those that are interested in looking beyond the next several sessions and are concerned about what may happen in the New Year. So in that light, you can view the Dow Analysis video As the Dow Goes, So Goes the Country

With the holiday season I may not have an analysis posted next weekend. So please pay attention to the range on the chart. Have a wonderful and safe holiday season, and profitable trading in the meantime. For those of you who view my EUR/USD analysis each night, well, I will see you soon, since we still got several sessions before Christmas.

Cheers and Happy Trading!

Analysis by: http://www.Forexpros.com - Written by Cory Mitchell for Forexpros

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